Mozambique picks banking syndicate to repay US$ 700 million hydro debt to Portugal

14 May 2007

Maputo, Mozambique, 14 May – Portugal’s BPI is among the leaders of a banking consortium that will fund the repayment of Mozambique’s debts of US$ 700 million to the Portuguese Treasury as part of a bilateral accord to transfer ownership of the Cahora Bassa Hydroelectric (HCB) company from Lisbon to Maputo, media have reported.

Cited by Portuguese news agency Lusa, Maputo weekly Savana said BPI, which has a 30 percent stake in BCI Fomento de Moçambique, and Credit Agricole of France have been chosen by the Maputo government to fund the loan repayment to Portugal.

Also participating are Standard Bank/DBSA, Millennium BCP and other Mozambican banks. BNP Paribas and Deutsch Bank had applied to join the operation but were not selected.

Maputo and Lisbon agreed last year to reduce Portugal’s controlling 82 percent stake in HCB to 15 percent to boost Mozambique’s stake in the giant River Zambezi hydro to 85 percent. Under the deal, Maputo pledged to pay US$ 250 million upfront and a second installment of US$ 700 million to take full control of HCB. (macauhub)